Thecorporate nameis an example of a mandatory element when registering a company in the Commercial Register (RCS). It is used to identify the legal personality of the company.
The partners are free to choose the name of the company. However, this name must take into account the regulations and the rights of third parties. How then to choose the name of the company? What are the means to implement to protect it and what is the difference between corporate name and corporate name. All the answers to your questions in this guide.
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How to choose the corporate name of your company?
The question that arises in the first place is: what is the corporate name? This is the official name of the company defined in the articles of association. In principle, the law does not impose any form. The naming of a company is generally a decision of the founding partners of the company. However, this freedom has some legal limits in order to protect the company itself and the rights of third parties.
Freedom of choice of corporate name
The official name of the company is freely chosen by the partners. This principle is applicable in the context of aSARL, an SAS, an EURL and a SASU. For thesole proprietorships, the business name must match the entrepreneur's last name.
In general, the name should reflect the image that entrepreneurs want to give to their company. It is therefore a strategic decision for the company. It is often chosen to attract customers and highlight the activities carried out by the company. Partners may choose a corporate name identical to thenom commercialof the company. During the life of the company, they can change its name.
Many possibilities are available to partners to choose from:
- The surname of one of the partners;
- A name associated withl’objet social ;
- An invented name.
First, using the surname of the majority shareholder as the official name of the company is very common in a family business. In this case, this partner will not be able to "remove" his name from the company: even if he leaves it, it will keep his patronymic name. This choice therefore has certain drawbacks. The partners can however proceed to a change of corporate name.
Opting for an invented name is quite possible to target the company's potential customers. This choice is rather adapted to those companies which market products. The goal is to grab the attention of customers. The company may use an acronym if the name is too long. The formalities for declaring and modifying the acronyms are similar to the procedures for modifying the name of the company.
Existing legal prohibitions
The law provides some limits on the choice of the name of a company.It must not infringe the rights of third parties. The concept of "third parties" includes commercial individuals, companies, economic interest groups and associations.
The principle of "priority of use" may apply to corporate names. Thus, it must be ensured that the name envisaged does not harm the prior rights of third parties who have already registered the name in question. Otherwise, the company may be sued in court for unfair competition. The judge's assessment is based on the degree of distinction between the activities, consumers and territory operated by the company and third parties. The goal is not to cause confusion among customers. Faced with two different companies with the same name, she would not find it.
However, a company may adopt a name already created by a third party provided that it has obtained authorization from them. This operation is generally done for a fee.
The law also prohibits companies from opting for a name dedicated to a regulated activity or a particular legal structure.
In addition to these restrictions, the presentation of the corporate name also obeys another rule. The official name that appears on the legal documents of the company must be preceded or followed by the following words or acronyms, depending on the legal form of the company.
- "SA" or "société anonyme";
- "SAS" or "simplified joint-stock company";
- "SCA" or "partnership limited by shares";
- "SARL" or "limited liability company":
- " SNC " or " partnership " ;
- " SCS " or " limited partnership ".
Examples of company names related to the corporate purpose
The partners can also adopt a corporate name linked to the activities of the company, i.e. to its corporate purpose.The main objective tends to stand out from competitors and avoid the risk of confusion. Thus, a descriptive name such as " plumbing " or " beauty supply store " or " hardware store " should be avoided. Remember to specify. Here are two examples according to the corporate purpose of the company:
- Plumbing on rue Saint-Pierre;
- Village store.
Checks to be made before choosing
In order to avoid conflicts, it is advisable to carry out a search for anteriority and availability with theINPI(National Institute of Industrial Property) before any decision. This formality is not mandatory, but recommended as a preventive measure. The prior art search consists of verifying that no company has filed a trademark corresponding to the proposed corporate name or that it has not already been adopted by another company. If there is a risk of anteriority, the ideal is to find a new one. This risk may arise even if the name is not completely identical.
How to protect the name of your company?
The official name is of great importance for the company, because it is through this name that it is known to the customers. Therefore, the company must take all necessary measures for its legal protection. So how do you protect your company's name?
The law grants protection to both the corporate name and the commercial name of the company, provided that the necessary formalities are carried out for this purpose.As soon as the company is registered with the RCS, the protection is effective. Thus, a company in formation cannot benefit from it.
If a company legally registered with the RCS believes that it is a victim of the use of its name by another company. The victim company can take legal action to enforce its right by providing proof of harm and demonstrating the risk of confusion.
In order to be entitled to additional protection, the trademark registration with the INPI is essential. Therefore, if a company uses the name of another company, the victim will be able to sue for infringement. Indeed, this measure is more effective due to the fact that it does not require proof of the harm suffered, which is not the case in the context of an action for unfair competition where it must be demonstrated that a harm was caused to the company.
Registering a domain name is also possible to fight against cybersquatting. This practice consists of using a domain name corresponding to the official name of another company in order to disrupt its online presence. Registering your domain name is therefore an effective solution to anticipate this potential problem.
What is the difference between denomination and company name?
Thesocial reasonalso corresponds to the official name of the company. In principle, since 1985, the term "company name" has been used to qualify and identify civil companies. It must be made up of the names of the partners, who will have to answer for the debts of the company. The resemblance with the corporate name lies in the fact that the corporate name must also appear in the articles of association. The means of protection are also the same.
Other concepts such astrade name and signare also often confused with the corporate name. However, they do not mean the same thing.Indeed, the commercial name corresponds to the name known to the public. It makes it possible to characterize the goodwill. It is optional and can be identical to the corporate name. If the partners decide to adopt a trade name, the latter must be registered when it is registered with the RCS.
The trade name, on the other hand, designates the name used to identify the place of operation of the company's activity. It can appear on the facade of the commercial premises, for example. Like the trade name, it is not mandatory and the partners have the choice of whether or not to adopt a sign identical to the corporate name of their company.
If the company has several premises, it may adopt different commercial signs for each point of sale.Change my corporate name
Samuel is co-founder of LegalPlace and responsible for editorial content. The ambition is to make legal know-how accessible to as many people as possible thanks to simple and quality content. Samuel is a graduate of Supelec and HEC Paris
Last updated on 04/25/2022
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